Citizens Bank Home Equity Loan Review March 2024

See Citizen Bank's website for full terms and disclosures.

Does Citizens Bank Offer Home Equity Loans or HELOCs?

Citizens Bank does not currently offer home equity loans (HELs). But it does offer home equity lines of credit (HELOCs). 

Actually, the bank’s website can be confusing about this. And you may see links to “home equity loans.” But, when you click through, you’ll find yourself reading about HELOCs. 

This may be Citizens Bank’s not-so-subtle way of suggesting to borrowers that a HELOC can easily substitute for a HEL. But, while a HELOC may in some circumstances be an acceptable alternative, the two products are very different – as we’ll explore in a minute.

And you may well find that a HELOC won’t meet your needs. If that’s the case, Citizen Bank can’t help you. But don’t worry. Other lenders offer home equity loans.

Citizens Bank can trace its roots back to a single Rhode Island branch founded in 1828. And it took it nearly 150 years to grow to 30 outlets, all in that state.

But, since the 1980s, Citizens Bank has transformed itself. And it now (at the end of 2021) has 940 branches across New England and into the Mid-Atlantic and the Midwest. The group had assets of $188 billion at that time.

The bank offers a comprehensive range of banking services and products to consumers and businesses, including home equity lines of credit. However, it offers these lines only on homes that are located in CT, DC, DE, FL, IL, IN, KY, MA, MD, ME, MI, NH, NJ, NY, OH, PA, RI, VA or VT. If your property isn’t in one of those states, Citizens Bank can’t help you.

Citizens Bank Home Equity Loan

So Citizens Bank does not offer home equity loans. And that’s a pity because HELs present a good way for homeowners to tap their equity. 

Your home equity is the amount by which your home’s market value exceeds the mortgage balance on that home. Usually, that’s just your current mortgage balance. But, if you have existing second mortgages (HELs or HELOCs), those also count.

HELs are installment loans, generally with fixed interest rates and fixed terms. So you know exactly where you stand: each monthly payment will be the same and the loan has a set end date. Of course, the longer your loan term, the lower each payment will be, and the higher your total interest costs.

Depending on your needs, a HELOC can be as good or better than a HEL. But they’re very different beasts.

Citizens Bank HELOCs

The bank has two types of HELOC: its standard one and its GoalBuilderTM one. 

Both sorts of Citizens Bank HELOC are split into two phases. For the first 10 years, it’s a bit like a credit card. You can borrow, repay and borrow again up to your credit limit. You only have to pay interest on your current balance. This is called the “draw” phase.

At the end of the 10th year, you enter the repayment phase, which lasts 15 years. During that time, you can’t borrow anymore and your payments are reset to cover the interest and clear your balance in the remaining years. Citizens Bank HELOC interest rates are variable, so your payment can change based on the rate and remaining balance. The possibility of higher rates might motivate you to clear your remaining balance faster. 

Here’s what else you need to know about the bank’s standard HELOC:

• The combined balances of your existing mortgage, any second mortgages and the new HELOC can’t exceed 80% of your home’s market value. (This is called your combined loan-to-value ratio or CLTV).
• Interest rates can be as low as 4.50% (Prime -0.25%) annual percentage rate (APR)*. But your rate will depend on your circumstances. Check out the bank’s HELOC calculator to get a rough idea of your likely rate. Rates can be as high as 21% APR.
• You can save 0.25% off your rate with automatic monthly payments from a Citizens Bank checking account.
• There are no setup or appraisal fees.
• The bank doesn’t publish a minimum credit score for HELOCs. Use that HELOC calculator to see if yours is high enough – and what difference it makes to your APR
• You can borrow from $17,500 up to an unspecified maximum (see GoalBuilder, below, for smaller HELOCs). But the bank says its best rates go to those with “line amounts of $200K or more.” So the maximum must be quite high.
• The standard draw period is 10 years, followed by a 15-year repayment period. 
• There’s a $50 annual fee to maintain these accounts. But that’s waived in the first year.

*That 4.75%% is calculated as the prime rate minus 0.25%. Note that all Citizens Bank’s HELOCs have variable rates, meaning the amount you pay will change in line with the prime rate. As of this writing, it appears likely that rate increases will begin imminently and continue for some time.

GoalBuilder option

A GoalBuilder HELOC is the same as the bank’s standard HELOC except in these respects:

• Borrow from $5,000 to $25,000.
• Rates start at Prime +3.25% or +3.00% with auto pay from a Citizens checking account.
• There is no annual fee.

So these GoalBuilders may suit you if you want a more modest line of credit.

How to Apply for Citizens Bank Home Equity Loans

We like Citizens Bank’s HELOC calculator because it lets you see what your loan might look like anonymously. You don’t have to supply any information that could identify you and there are only a few, fairly straightforward questions. Of course, the accuracy of its calculations depends on the accuracy of the information you supply.

You can apply for your HELOC online, over the phone, or in a Citizens Bank branch. So your options for applying are as good as any and better than most. 

Of course, once you apply, you’ll have to provide personal information. And usually a lot of it.

 HELOCs are mortgages, and the supporting documentation you’ll have to supply won’t look very different from that you submitted to finance a home purchase. 

Use the application checklist on the bank’s website to see all the documents you’re likely to need. If you get them all ready before you apply, you can take copies with you to the branch or email or upload them if you’re working over the phone or online. The sooner you submit your documents, the sooner the bank can approve your loan.

Citizens Bank says: “Typically it takes about 45 days from application to funding, but that can vary depending on your individual situation and how quickly we receive the required documentation to complete your application.”

Citizens Bank Home Equity Expert and Consumer Ratings

We visited 10 websites to see what experts and the bank’s customers think of Citizens Bank’s products and services. Where possible, we paid particular attention to its HELOCs.

Of those that gave star ratings, the bank scored an average of 3.3 out of 5. That’s respectable, compared with its peers.

As is usual with such reviews of banks, its customers viewed Citizens Bank more harshly than the experts did. That’s probably because satisfied customers rarely post glowing reviews while those who are dissatisfied tend to be highly vocal. 

Citizens Bank is an accredited business with the Better Business Bureau. And the BBB gives it an A+, which is its highest possible score.

Citizens Bank Home Equity Pros

Here’s what you might like about Citizen Bank’s HELOCs:

1. No application fees or closing costs
2. Apply online, over the phone or face-to-face in a branch
3. Competitive rates

If you want a HELOC, you might well wish to add this bank to your short list.

Citizens Bank Home Equity Cons

What might put you off Citizens Bank’s HELOCs? Here are some drawbacks:

1. Only available in CT, DC, DE, FL, IL, IN, KY, MA, MD, ME, MI, NH, NJ, NY, OH, PA, RI, VA or VT
2. Annual fee of $50, though waived during the first year

Of course, the first is a disadvantage only if you don’t live in one of those states. Is the second enough to deter you? 

Citizens Bank's alternatives to home equity loans

We can find no trace of personal loans on the bank’s website, though it does offer both auto loans and student loans. Personal loans can sometimes be an alternative to HELs. However, unless you’re exceptionally creditworthy in every respect, those typically have appreciably higher interest rates than HELs. 

Another alternative to a HEL can be a cash-out refinance, which Citizens Bank does offer. However, these replace your existing mortgage with a larger one, which brings much higher closing costs than a home equity loan. So you’re unlikely to find one of these financially viable unless you’re borrowing a large sum. You also probably won’t want a cash-out refinance unless you can beat your existing mortgage rate.

Citizens Bank Home Equity Alternatives

If you want a HELOC, we’d suggest you apply to Citizens Bank and several other lenders and then pick the best overall deal. 

But what if a HELOC doesn’t meet your needs and you require a home equity loan? Then Citizens Bank can’t help you. Check out Bills.com reviews of other home equity lenders.